| Failure to Include Post Accident Researcher in Litigation Hold Leads to Adverse Inference |
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In Yelton v. PHI, Inc., the defendant in a products liability action was sanctioned in the form of an adverse inference and an award of attorneys fees for failing to include a researcher, hired after the triggering event to conduct a simulation of the accident, in its litigation hold. No. 09-3144, 2011 WL 6100445 (E.D.La. December 7, 2011).
There, a helicopter owned and operated by PHI, Inc. was struck in the windshield by a red-tailed hawk, causing the helicopter to crash and killing all but one passenger. Both PHI and Sikorsky Aircraft, the manufacturer, were named as defendants. Sikorsky issued a litigation hold three days after the accident to seventeen employees believed to have information or knowledge concerning the accident and added eighty-three employees only a month later. About a month after expanding the litigation hold to 100 employees, the lawsuit was filed. In the meantime, shortly after issuing the litigation hold, Dr. Wonsub Kim was hired to conduct a simulated bird strike event on the aircraft involved in the accident. Dr. Kim was not advised of the litigation hold at the time he was hired. A year into the lawsuit, Dr. Kim was issued a new laptop and his old one, containing information regarding the analysis he conducted, was refreshed causing a loss of information. Approximately two years after the lawsuit was commenced, Sikorsky "realized" it failed to include Dr. Kim in the litigation hold and corrected the mistake. PHI sought sanctions for spoliation of evidence relating to the deletion of information on Dr. Kim's laptop. In doing so, PHI alleged that Sikorsky officials knew of Dr. Kim's project, knew of its relevance to the litigation and intentionally failed to place him on the litigation hold list so critical information developed in the analysis could be destroyed. The Court found that at the time Dr. Kim was hired, after the accident but before the lawsuit, he was a "key player" because he was hired to conduct a simulation of the accident. The Court rejected arguments that Dr. Kim's analysis was done in connection with a National Transportation Safety Board investigation and further rejected the notion that the legal department was unaware of his analysis based on internal emails. Finding that spreadsheets, powerpoints, word documents, reports, and information were destroyed when Dr. Kim's laptop was refreshed, the Court held that Sikorsky acted with "a significant degree of culpability," hinting that the misconduct was intentional, and concluded that the logical inference was that the results of the analysis were not favorable to Sikorsky. The Court awarded PHI sanctions in the form of both an adverse inference, to be crafted by the trial judge, and attorneys' fees and costs incurred due to the spoliation. For a copy of the opinion, click here. |